Eni has laid claim to discovering the largest gas field in Egypt and the Mediterranean Sea and says the field could become one of the world’s largest natural gas finds.
The Italian operator says the deepwater Zohr field could hold up to 30 Tcf of lean gas in place (or 5.5 billion boe) over some 100sq km.
The discovery well, Zohr 1X NFW, is in 4757ft (1450m) water depth, was drilled in the Shorouk Block (Block 9), which was awarded to Eni in 2014, by the Egyptian Ministry of Petroleum and the Egyptian Natural Gas Holding Co. Block 9 is deep offshore and close to Cypriot waters.
Eni says it will now appraise the field with the aim of accelerating a fast track development of the discovery that will use at best the existing offshore and onshore infrastructure.
“It's the largest gas discovery ever made in Egypt and in the Mediterranean Sea and could become one of the world’s largest natural-gas finds,” the firm claims. “This exploration success, after its full development, will be able to ensure satisfying Egypt’s natural gas demand for decades. Egypt remains at the heart of the Eni Group’s international strategy: an alliance that has lasted for more than 60 years.”
Russia holds the world’s second-largest natural gas reserves, followed by Iran, which has the world’s largest gas field, South Pars, shared with Qatar (which calls it North Dome), estimated to contain 1800 Tcf.
Other countries with gas reserves in the Mediterranean Sea include Cyprus, Lebanon and Israel, all of which have risen on the international exploration and production map following giant gas discoveries include Leviathan, offshore Israel, in 2010, containing an estimated 18 Tcf, but which have sparked political tension in the Levant Basin.
Simmons & Co. analyst David Kistler says Eni's new discovery could be potentially negative news for Noble Energy because it provides more competition for Israeli gas in the region. "In addition, the Egyptian authorities are likely motivated to develop the field as quickly as possible in light of natural gas shortages in the country," he said in Simmons morning note. "This could remove a key customer for Leviathan gas while placing more gas competition into the international market."
Eni has recently been stepping up its activities in Egypt, including signing a new US$2 billion deal for exploration and development activities offshore Egypt.
Just over a month ago the firm announced it had discovered 15 Bcm of gas in place at the Nooros exploration prospect in the Abu Madi West license, in the Nile Delta, 120km northeast of Alexandria.
Zohr 1X NFW was drilled to a total depth of approximately 13,553ft (4131m) and hit 2067ft (630m) of hydrocarbon column in a carbonate sequence of Miocene age with excellent reservoir characteristics (400m+ of net pay). Zohr’s structure has also a deeper Cretaceous upside that will be targeted in the future with adedicated well.
Eni CEO Claudio Descalzi says: “This historic discovery will be able to transform the energy scenario of Egypt in which we have been welcomed for over 60 years. The exploration activities are central to our growth strategy: in the last seven years we have discovered 10 billion barrels of resources and 300 MMbbl in the first half of the year, confirming Eni’s leading position in the industry. This exploration success acquires an even greater value as it was made in Egypt which is strategic for Eni, and where important synergies with the existing infrastructures can be exploited allowing us a fast production startup.”
Eni, through its subsidiary IEOC Production, holds a 100% of the contractor’s working interest in the Shorouk Block and is the operator of the concession.
Eni first discussed exploration in Egypt with leaders there in 1954, with the first discovery in 1955 and the first barrels of crude arriving from Egypt to Italy in 1957. The first offshore discovery was made in 1961.
Egypt’s exploration and production industry faced upset following the revolution in 2011. Egyptian President Abdel Fattah Saeed Hussein Khalil el-Sisi, chief of Egypt’s armed forces and who ousted post-revolution democratically elected president Mohammed Morsi, has been focusing on the energy sector in order to reduce, within five years, the country’s dependence on external resources, with debt payments made to major IOCs, including BP, BG Group and ENI, encouraging firms to re-start exploration.
However, the country still suffers from ongoing internal political tensions and international criticism, most recently over the three-year prison sentences given to three Al-Jazeeri journalists, who were convicted of “spreading false news”.
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